31 August 2014 | Posted by Zachary
Daimler & BYD's joint Denza electric vehicle is now reportedly being produced in China. It should hit the market in September.
Daimler, a German company, and BYD, a Chinese company, created the joint venture Shenzhen BYD Daimler New Technology Co., Ltd., last year. The Denza, a 100% electric vehicle, is being produced in Pingshan, Shenzhen. The faactory has the capacity to build 40,000 electric cars per year.
With BYD having 37% of the Chinese electric car market this year, more than any other company, it's a good partner for Daimler. Setting up the joint venture also helps a great deal with Chinese policies. "Domestic production will help Daimler evade China’s 25% export taxes, in addition to the value added tax and consumption tax, which combine to substantially raise model prices," Trefis notes.
China is a bit of a sleeping giant in the electric car market. In 2012, it announced an aim to have 500,000 electric vehicles on the road by 2015, and 5 million by 2020. Only 17,600 were sold in 2013.... With such a huge gap between sales and ambitions, the Chinese government is increasing incentives, trying to convince provinces to make their incentives more inclusive (at least, for products made in China), and installing a lot of charging stations.
"As the country looks to persuade consumers to purchase environmentally-friendly electric vehicles, government subsidies could lower the 369,000 yuan (around $60,000) starting price for a Denza by around 110,000 yuan, almost 30%. In addition, starting next month, China will also exempt new energy vehicles, including plug-in electric and hybrid-electric and fuel-cell vehicles, from a purchase tax. This will further lower prices for Denza and make the high-priced electric vehicles more affordable for customers."
Furthermore, the government has just announced plans to pump 100 billion yuan ($16 billion) into the installation fo EV charging infrastructure.
Some provinces are making strong moves in support of electric vehicles as well. For example, the city of Shenzhen recently passed a law requiring that all new apartment buildings or condos include EV charging stations for each parking space in the project.
Taking everything into consideration, I think electric vehicles will have a strong future in China. With BYD having such a strong presence in the country (a few years ago, self-made Chinese billionare Wang Chuan Fu, who is the CEO, chairman, founder, and president of BYD, was actually the richest man in China), I think Daimler, which is already doing well in China because of its strong Mercedes brand, made a good decision teaming up with BYD.
Image by Shenzhen BYD Daimler New Technology